Auditor General (AG) Junias Kandjeke has given the Grootfontein Municipality an adverse audit opinion for its failure to furnish him with sufficient evidence on how it spent public resources during the 2018/19 financial year.
The AG’s report was submitted to the National Assembly recently for scrutiny – it was completed in September 2021.
“The financial statements do not represent fairly the financial position of the Municipality of Grootfontein,” Kandjeke said.
He premised his findings on 11 key matters.
The municipality, one of the biggest in the country does not have an asset register. Further, it misled the auditors about its investment in the Central North Regional Electricity Distributor (Cenored).
“The investment in Cenored could not be fully verified. The share certificate for the investment reflects a value of N.dollars 20.1 million but the balance disclosed in the financial statement amounts to N.dollars 29 million. This is a difference of N.dollars 8.7 million,” the auditors found.
The local authority also understated the interests received by N.dollars 617 805 in the statement of surplus and deficit.
“The auditors observed that the balance of Build Together loans receivable as per the statement of financial position differ from the balance as per the Build Together records with an amount of N.dollars 317 915,” Kandjeke added.
At the core of the municipality’s weakness are its accounting processes and systems.
“There was a difference of N.dollars 11.5 million between the bank reconciliation and the statement of financial position bank balance. This was a result of outstanding cheques not included in the statement of financial position.”
Kandjeke took the municipality’s ability to account to test.
“There were unknown differences noted for cash receipts from customers of N.dollars 17.6 million under note 29 and cash payments to suppliers of N.dollars 381 834 under note 30. These were in excess and less than the statement of cash flow respectively,” the AG noted.
Evidence to support the number of erven sold during the period of the audit is zilch.
“We could not thus verify the amount of N.dollars 4.8 million as stated in the financial statements…included in the statement of surplus or deficit is an amount of N.dollars 4.8 million. [These] erven [were] sold during the 2018 financial year but only paid during the 2019 financial year and the sales were recorded when the erven [were] paid,” he added.
In 2018, Kandjeke issued a disclaimer of opinion for the municipality’s financial statements for 2015/16 as it failed to provide sufficient evidence on how it spent over N.dollars 73 million.
Source: The Namibian Press Agency
